The next month， May is destined to be a critical period for the ferro- alloy industry. On the eve of The 15th China Ferro- alloys International Conference, we will make some analysis and judgment on the main products of ferroalloy, especially the market changes of manganese alloy.

Spot market: Spot market: The price of silicon-manganese alloy continues to decline. It is predicted that the biding price of silicon manganese alloy will be about 8,000RMB/ton in May. Compared with the price last month it will be 300 RMB/ton declined. The price difference between steel plants in North and plants in South will be 100-200RMB/ton . The biding price of high carbon ferromanganese will be 7300RMB/ton which is declined 700RMB/ton compared with the price in April. The retail price is going to be much lower.

Spot inventory of manganese ore is rising month by month and the prices are declining. According to statistics, at the end of last weekend, the manganese ore inventory of Tianjin port was 2.3 million tons; in Caofeidian port was 300,000 tons and  in Qinzhou port was 530,000 tons. (manganese ore volume from Australia was 230000 tons, the volume from South Africa was 100000 tons, the volume from Gabon was 700000 tons and the rest were from Malaysia and Brazil ) totally 2.93 million tons. The price of manganese ore is declining and we predict that the price is going to have a big drop.

The demand has not changed. Environmental factors affect the production of steel enterprises. In Handan, Hebei Province  and Wuan area the limitation is 50%, other areas 10%. Five steel enterprises in Xuzhou have stopped productions, and the monthly output of 850,000 tons steel has been ended. Although the purchase volume of HBIS increased in May, there is still no recovery signs. Besides, there is a tendency that the whole steel plants’ demand for the alloy will be reduced. It is not obvious that the existing alloy production enterprises reduce production especially before March. At present, some alloy enterprises are consuming the existing manganese ore, reducing the purchase of spot manganese ore and futures manganese ore. Some companies are preparing to reduce their productions. The large inventory of manganese ore and the decline of the shipping futures price indicate the fact that the demand of the alloy enterprises for manganese ore has been decreased. If the price of the shipment manganese ore does not fall back to a reasonable price--the acceptable price level for the alloy enterprise,the alloy enterprise will not buy future goods.

Demand for steel products has not been significantly positive. The demand for steel production is not positive. Steelmakers' profits declined by 50% compared to the profit a year ago that we had confirmed with steel plants. The downstream firms of steel plant, real estate, automobile, infrastructure construction, machinery processing, shipbuilding and other industries have encountered the bottleneck of development.

There are no winners in the sino-us trade game. The game has influenced the steel industry. Exports of steel products are expected to fall sharply in 2018. The biggest impact of the trade conflict and the change in rates and tariffs have influenced the steel and raw materials fields. From national policy, we will continue to eliminate 30 Million tons of backward production capacity in 2018, check the ground steel recovering, greater environmental inspections that would limit the release of overall steel capacity. Therefore, the influence of raw material demand is great.

To sum up, ferroalloy is the raw material of steel, manganese ore is the raw material of manganese alloy,they are both interdependent and interrelated industries. Manganese ore suppliers should respect the trend of downstream alloy and steel market,maintain a relatively reasonable price, keep contract with the downstream customers, so they will achieve double win market goals. Unilateral maintenance of  the high prices will loss customers,and market. As it turns out, the price of manganese has fallen.

• [Editor:yuyunqing]